1. Field of the Invention
The invention relates to automated supply chain management. Specifically, predicting future demand for a set of new products.
2. Background
A supply chain is a network of retailers, distributors, transporters, warehouses, and suppliers that take part in the production, delivery and sale of a product or service. Supply chain management is the process of coordinating the movement of the products or services, information related to the products or services, and money among the constituent parts of a supply chain. Supply chain management also integrates and manages key processes along the supply chain. Supply chain management strategies often involve the use of software to project and fulfill demand and improve production levels.
Logistics is a subset of the activities involved in supply chain management. Logistics includes the planning, implementation and control of the movement and storage of goods, services or related information. Logistics aims to create an effective and efficient flow and storage of goods, services and related information from a source to the target location where the product or source is to be shipped to meet the demands of a customer.
The movement of goods and services through a supply chain often involves the shipment of the goods and services between the source location at which the product is produced or stored and the target location where the product is to be shipped to the wholesaler, vendor or retailer. The shipment of products involves a transport such as a truck, ship or airplane and involves the planning of the quantity of the products to be shipped in the transport. The source location from which a set of products is shipped on a transport is selected based on the availability of the products at the source location.
Supply chain management systems generate demand forecast data based on a past order or demand history for each product to be shipped. New products do not have a past order or demand history. This forces a human guess to be used to determine shipment and inventory levels for new products. As a consequence, poor guesses result in inappropriate quantities of new items being shipped to target locations and inefficient use of inventory space at source and target locations.